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From |
"Dawit Lidia" <[email protected]> |

To |
[email protected] |

Subject |
st: individual effects to predict fitted values |

Date |
Mon, 03 Jan 2005 19:18:09 +0000 |

Dear all,

I was trying to estimate the impact of agricultural technology on mean

yield using the following regressions predicted values. I group my

observations into those who adopted the technology (con==1) and those that do not

(con==0). I specified the following exogenous switching regression model

1) Fixed effect

areg x1 x2 if con==1, absorb(hhno) robust

predict u_hat1, xbd

areg x1 x2 if con==0, absorb(hhno) robust

predict u_hat0, xbd

2) Random effects

xtreg x1 x2 if con==1, i(hhno) re

predict u_hat1, xbd

xtreg x1 x2 if con==0, i(hhno) re

predict u_hat0, xbd

My questions are as follow

1) Does it give sense to predict the fitted values including the individual effects (as indicated above) to estimate the mean impact of the technology by taking the difference of predicted values (u_hat1-u_hat0)?

2) Do I need to use 'cluster' option in fixed and random effect models if I assume observations within household (group) are not independent?

Thanks for your help.

Menale

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